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Ex-NY congressman Chris Collins sentenced to 26 months for insider-trading tip to son
Former U.S. Rep. Chris Collins arrives at federal court for sentencing Friday, Jan. 17, 2020, in New York.Seth Wenig | APA disgraced and highly emotional former New York congressman Chris Collins was sentenced Friday to 26 months in prison for an illegal stock tip that he gave his son from the White House lawn about…
Former U.S. Rep. Chris Collins arrives at federal court for sentencing Friday, Jan. 17, 2020, in New York.
Seth Wenig | AP
A disgraced and highly emotional former New York congressman Chris Collins was sentenced Friday to 26 months in prison for an illegal stock tip that he gave his son from the White House lawn about a biopharmaceutical company's failed drug trial.
The sentence from Judge Vernon Broderick in U.S. District Court in Manhattan came 14 months after the Republican Collins won re-election to the House for a fourth term in his Buffalo-area district while under indictment in the case and claiming he had done nothing wrong.
“My life has been shattered. My reputation has been shattered,” Collins said through tears before he received his sentence. “But mostly my family has been shattered.”
Collins, clad in a dark blue suit and matching tie, said nothing as he left the courthouse, walking straight into a van that was parked outside.
Collins must surrender to the Bureau of Prisons on March 17. His attorneys requested that Collins be sent to a federal prison camp in Pensacola.
The judge sentenced Collins to 26 months each for one count of conspiracy to commit securities fraud and one count of lying to the FBI. Broderick ruled that the terms would run concurrently.
Collins was also ordered to pay a $200,000 fine and one year supervised release.
Federal sentencing guidelines had suggested a prison term of between 46 and 57 months for the wealthy entrepreneur Collins, who served on the board of the drug company whose information he illicitly shared with his son, Cameron.
But prosecutors asked Broderick to impose a prison sentence of nearly five years, saying that in committing his crime and later lying about them to the FBI and the public, “Collins came to embody the cynical idea that those in power who make the laws are not required to follow them.”
Defense lawyers had requested a sentence of probation for Collins, 69, who was the first member of Congress to endorse President Donald Trump‘s first bid for the White House.
During the sentencing hearing, a sobbing Collins expressed shame and regret and pleaded for mercy for his son. Cameron Collins, who also pleaded guilty in the case, is due to be sentenced next Thursday.
“I have no excuse. I have tarnished my reputation,” Collins said. “People feel sorry for me. They shouldn't.”
He apologized to his former colleagues in Congress, his former constituents and his friends in his community. And he repeatedly lamented the impact his actions have had on his family. “It's hard to look at my wife, who got her credit card purchase declined because I'm her husband,” Collins said of his spouse, who sat behind him in the courtroom.”
Collins's attorneys acknowledged that the former congressman had made mistakes. But they maintained that he is a “fundamentally good and decent human being.”
Federal prosecutors, however, said during the hearing that Collins's actions were “totally gratuitous.”
Collins pleaded guilty October 1 to conspiring to commit securities fraud, and to making false statements to the FBI about the frantic calls he made to Cameron in June 2017 during a Congressional picnic at the White House.
Collins had learned minutes earlier from the CEO of Innate Immunotherapeutics that a multiple sclerois drug made by that Australian biotech firm had failed to perform as hoped for in clinical trials.
Once he finally got Cameron on the line, Collins warned his son about the failed drug results, which had not yet been made public.
Collins, who in addition to being an Innate board member was a major shareholder in the company, was barred from sharing non-public information about the firm.
Cameron, his fiancee, her parents and a number of others then sold off their Innate shares in the days after Collins spoke to his son, avoiding big losses before the stock price plunged by 92 percent when the test results were made public.
Ten months later, FBI agents showed up at Collins' house and asked him about tradiing activity in Innate around the time of the drug results being released.
“Collins elected to speak with the agents, and to lie to them in order to divert law enforcement from the trail of evidence showing that he and Cameron had committed insider trading,” prosecutors wrote.
Collins originally claimed he had not told anyone about the results of the drug tests after receiving them.
Collins submitted his resignation from his Buffalo-area seat in Congress a day before his guilty plea, which came after more than a year of claiming he had done nothing wrong.
Collins himself did not sell any Innate shares before the drug trial results were made public.
Prosecutors said Collins has a net worth of $13.8 million and has nearly $7 million owed to him. His personal assets include “a baseball and coin collection each of which is worth $1 million.”
One of Collins' lawyers, in a sentencing filing last week, said, “He has paid a heavy price for his crimes.”
“Chris' ruinous decision to tip his son was isolated, spontaneous, and emotionally driven,” the lawyers wrote in the filing, which included letters of support for Collins from former House Speaker John Boehner, and other past and current GOP members of Congress.
Boehner, in his letter to the judge, said of Collins, “I know this experience has been mortifying for him.”
“I continue to believe he is a good man who loves his family and his country,” Boehner wrote.
Cameron Collins sold more than 1 million shares of the company's stock, avoiding about $571,000 in losses, while his fiancee's father, Stephen Zarsky, avoided losses totaling almost $144,000 after trading on the illicit tip.
Stephen Zarsky, the father of Cameron's fiancee, will be sentenced next Friday.
Neither Lauren Zarsky nor her mother, Dorothy Zarsky, were prosecuted. The two women avoided losses totaling more than $42,000 in their own trading on the tip.
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